Legislative Session Yields Wins for Ag, Work Remains on Tax Reform

LINCOLN, NE – In a legislative session where Nebraska Farm Bureau was able to work with state lawmakers to yield wins for agriculture, work still remains on the biggest prize sought by farmers and ranchers; the implementation of structural changes to better balance Nebraska’s overall tax burden and reduce the overreliance on property taxes to fund Nebraska schools, said Steve Nelson, Nebraska Farm Bureau president, April 21.

“We know the property tax issue won’t be solved overnight. It’s a process. We spent a good part of the session laying that foundation and we’re committed to building the coalitions and partnerships needed to get us where Nebraska needs to be on property taxes,” said Nelson.

Numerous ideas related to addressing the property tax issue were introduced during the 2016 legislative session which came to a close April 20. Ultimately, the Legislature passed and Gov. Pete Ricketts signed LB 958 into law. The measure adds another $20 million to the state’s property tax credit program specifically targeted to providing relief to agricultural landowners; those who have experienced the largest property tax increases over the last decade.

In addition to the increase in property tax credit dollars, some agriculture landowners will also benefit from the passage and signing of LB 959. The bill contains provisions eliminating the minimum levy penalty which reduces state aid to school districts with levies less than 95 cents. The change is expected to send $8.2 million in additional state aid out to rural schools, many of which currently receive no state equalization aid.

“We appreciate the Legislature and the Governor’s efforts on property taxes and school funding, but more must be done when it comes to the property tax issue,” said Nelson. “We’re already looking to 2017 and continuing the push for major reforms to better balance our tax structure.”

Outside of the property tax issue, several other key Farm Bureau priorities were adopted by lawmakers.

The passage of the Farm Bureau supported LB 176 is expected to help grow opportunities in Nebraska pork production. LB 176 eliminated a ban preventing Nebraska-based pork processors from owning hogs in the state. Banning processor ownership of hogs had indirectly eliminated opportunities for Nebraska farmers to feed and care for processor owned pigs in Nebraska. The practice is common in other states. Nebraska was the last in the U.S. to prohibit pork processors from owning hogs.

“From our perspective, LB 176 was about creating opportunities for farm families to partner with Nebraska pork processors to produce pigs here at home. Nebraska’s pork sector has struggled to keep pace with neighboring states because we had ultimately limited these types of opportunities for both parties,” said Nelson.

Farm Bureau’s key transportation bills also made it to the finish line in 2016 with the passage of both LB 960 and LB 977.

LB 960 creates three new road infrastructure programs. One to accelerate capital improvement projects as determined by the State Department of Roads, another to provide matching dollars for repair and placement of county bridges and a final program targeting infrastructure monies to attract and support new businesses and business expansion. LB 960 funds the programs using a one-time draw of $50 million from the state’s cash reserve fund and another $400 million over time from fuel taxes generated by the gas tax increase which passed in 2015.

LB 977 broadens the scope of agriculture machinery and equipment which qualifies for exemptions from weight and load limitations on state highways and county roads. The expanded exemptions include farmer owned mixer feed trucks and trucks equipped to spread or inject livestock manure. Ag machinery and equipment will still be subject to posted weight limitations on bridges and culverts. Counties and local authorities will still retain the right to impose weight restrictions through ordinance or resolutions.

“Our members had been wanting to see funding for county bridges addressed and LB 960 does that. LB 977 cleaned up some issues regarding how we treat trucks and farm implements that have been modified for livestock feeding and manure spreading which is important to our livestock sector,” said Nelson.

While not a Farm Bureau priority for the session, discussion about whether there is a need to modify the state’s constitution with “Right to Farm” language became an issue with a proposal to put such language before Nebraska voters. The measure (LR 378CA) advanced from the Agriculture Committee but stalled during first round floor debate.

“The Legislature’s action will give our members more time to chew on the whole concept of “Right to Farm.” There’s a lot more to this issue than meets the eye when we’re talking about modifying the Constitution,” said Nelson.

The Nebraska Farm Bureau Federation is a grassroots, state-wide organization dedicated to supporting farm and ranch families and working for the benefit of all Nebraskans through a wide variety of educational, service and advocacy efforts. More than 61,000 families across Nebraska are Farm Bureau members, working together to achieve rural and urban prosperity as agriculture is a key fuel to Nebraska’s economy. For more information about Nebraska Farm Bureau and agriculture, visit nefb.org.